|
Peregrine - Audited Group Results For The Year Ended 31 March 2004
Peregrine Holdings Limited
(Registration number 1994/006026/06)
(`Peregrine` or `the company`)
JSE code: PGR ISIN code: ZAE000015152
AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2004
Highlights
-Profit from operations up 52% to R105.7 million
-Headline earnings per share up 21% to 33.2 cents
-Resumption of dividend payments
Balance sheet
As at 31 March
R`000 R`000
Assets
Non - current assets 1,252,336 942,136
Property, plant and equipment 5,859 9,333
Intangible assets 187,562 221,500
Investment in associate companies 17,265 18,679
Financial investments 38,025 20,465
Long-term assurance fund investments 975,222 649,269
Loan receivable 6,069 6,069
Deferred taxation 22,334 16,821
Current assets 645,129 552,229
Trading securities 104,879 100,996
Trade and other receivables 53,568 75,317
Amounts receivable in respect of
stockbroking activities 365,397 246,623
Cash and cash equivalents 121,285 129,293
Total assets 1,897,465 1,494,365
Equity and liabilities
Capital and reserves 416,586 430,897
Share capital 245 245
Share premium 87,188 87,188
Treasury shares -90,476 -69,921
Accumulated profits 385,221 344,780
Non-distributable reserves 34,408 37,105
Amounts due to vendors 0 31,500
Minority interest 4,849 5,526
Non - current liabilities 991,335 657,118
Long-term assurance fund 975,222 649,269
Deferred taxation 16,113 7,849
Current liabilities 484,695 400,824
Trade and other payables 84,039 90,613
Amounts payable in respect of
stockbroking activities 387,221 252,179
Current portion of long-term liabilities 0 44,487
Taxation 13,435 13,545
Total equity and liabilities 1,897,465 1,494,365
Net asset value per share (cents) 205.1 198.3
Income statement
For the year ended 31 March
% 2004 2003
Change R`000 R`000
Revenue 36% 347,496 255,649
Operating expenses 30% -241,841 -186,255
Profit from operations 52% 105,655 69,394
Net interest (paid) / received -1,629 4,144
Interest received 18,996 19,863
Interest paid -20,625 -15,719
Realised and unrealised net changes in fair
value of long-term assurance fund
investments 76,218 -151,312
(Loss)/gain on revaluation of long-term
assurance fund liability -76,218 151,312
Income from associate companies 3,474 -5,542
- attributable to normal operations 3,474 3,325
- share of capital impairments and losses 0 -8,867
Capital profit on sale of business of
subsidiary 3,096 0
Capital impairments and losses -3,750 -13,989
Amortisation of goodwill -25,305 -21,328
Profit before taxation 150% 81,541 32,679
Taxation -29,219 -11,885
Profit after taxation 152% 52,322 20,794
Minority interest -9,821 -4,915
Attributable earnings 168% 42,501 15,879
% 2004 2003 As previously
Change R`000 R`000 reported
Reconciliation between
earnings and headline
earnings :
Attributable earnings 42,501 15,879 13,411
Adjustments:
Impairment of
investment in
associates, goodwill
and capital assets 3,750 13,989 14,303
Attributable share of
associate`s capital
impairments and
surpluses 0 8,867 8,867
Amortisation of
goodwill 25,305 21,328 23,482
Capital profit on sale
of business of
subsidiary -3,096 0 0
Headline earnings 14% 68,460 60,063 60,063
Reconciliation of
weighted average
issued
ordinary shares and
and diluted weighted
average
issued ordinary shares:
Weighted average
issued ordinary shares 206,307 218,814 232,429
Dilutive effect of
shares vesting at a
price
below the average
share price for the
period as
required by AC104 3,340 4,995 0
209,647 223,809 232,429
Headline earnings per
share (cents) 21% 33.2 27.4 25.8
Earnings per share
(cents) 184% 20.6 7.3 5.8
Diluted headline
earnings per share
(cents) 22% 32.7 26.8 25.8
Diluted earnings per
share (cents) 186% 20.3 7.1 5.8
Dividend per ordinary
share (cents) 0 0 0
Number of ordinary
shares in issue (`000) 245,116 245,116 245,116
Treasury shares held
(`000) 42,023 27,803 9,110
Weighted average
number of ordinary
shares in
issue (`000) 206,307 218,814 232,429
Diluted weighted
average number of
ordinary
shares in issue (`000) 209,647 223,809 232,429
1 - Refer note on change in accounting policy
Statement of changes in equity
For the year ended 31 March
Share
capital &
share Treasury Accumulated
premium shares profits
R`000 R`000 R`000
Balance at 31 March 2002 as
previously
reported 10,211 -34,607 329,890
Prior year adjustment - change in
accounting policy 2 -13,841 1,242
Balance at 31 March 2002 restated 10,211 -48,448 331,132
Issue of shares 77,222 -36,933
Treasury shares acquired -6,619
Treasury shares utilised 19,748
Write-down in value of treasury
Shares
on vesting 2,331 -2,231
Currency translation differences
Attributable earnings 15,879
Reduction in amount due to vendors
Vendor liability arising on
acquisition of subsidiary
Vendor liabilities settled
Balance at 31 March 2003 restated 87,433 -69,921 344,780
Treasury shares acquired -24,356
Write-down in value of treasury
Shares
on vesting 3,801 -3,774
Currency translation differences
Revaluation of available for
sale assets
Attributable earnings 42,501
Transfer from non distributable
reserve on disposal of business of
subsidiary 1,714
Reversal of non distributable reserve
raised in respect of trademark sold
during the year
Vendor liabilities settled
Balance at 31 March 2004 87,433 -90,476 385,221
Total
Non- Amounts capital
distributable due to and
reserves vendors reserves
R`000 R`000 R`000
Balance at 31 March 2002 as
previously
reported 42,346 23,703 371,543
Prior year adjustment - change in
accounting policy 2 -12,599
Balance at 31 March 2002 restated 42,346 23,703 358,944
Issue of shares 40,289
Treasury shares acquired -6,619
Treasury shares utilised 19,748
Write-down in value of treasury
shares
on vesting 100
Currency translation differences -5,261 -5,261
Attributable earnings 15,879
Reduction in amount due to vendors 20 -20 0
Vendor liability arising on
acquisition of subsidiary 31,500 31,500
Vendor liabilities settled -23,683 -23,683
Balance at 31 March 2003 restated 37,105 31,500 430,897
Treasury shares acquired -24,356
Write-down in value of treasury
shares
on vesting 27
Currency translation differences -6,738 -6,738
Revaluation of available for sale
assets 6,471 6,471
Attributable earnings 42,501
Transfer from non distributable
reserve on disposal of business of
subsidiary -1,714 0
Reversal of non distributable reserve
raised in respect of trademark sold
during the year -716 -716
Vendor liabilities settled -31,500 -31,500
Balance at 31 March 2004 34,408 0 416,586
2 - The consolidation of the Peregrine and Citadel staff share trusts
constitutes a change in accounting policy, and the comparative figures
have been restated.
Cash flow statement
For the year ended 31 March
2004 2003
R`000 R`000
Cash flow from operating activities 105,958 80,429
Cash generated from operations 135,443 90,004
Net interest (paid)/received -1,629 4,144
Taxation paid -27,856 -13,719
Cash flow from investing activities -9,158 -82,439
Acquisition of property, plant and equipment -3,935 -4,685
Development costs incurred 0 -1,000
Acquisition of subsidiary 0 -99,311
Acquisition of associate companies -64 0
Acquisition of investments -15,044 -1,739
Net decrease/(increase) in loans to associate
companies 4,113 -4,136
Disposal of business of subsidiary and
subsidiaries 4,200 -3,797
Disposal of associate company 0 250
Proceeds from sale of property, plant and
equipment 433 803
Proceeds from sale of financial investment 300 27,217
Distribution from associate 839 3,959
Cash flow from financing activities -104,808 55,864
Proceeds from share issue 0 77,222
Proceeds on vesting of shares held by staff
share trust 27 100
Acquisition of treasury shares -20,796 -41,622
Proceeds on conversion of preference shares 0 2,259
Payments to vendors and minorities -39,552 -26,582
(Decrease)/increase in interest bearing
borrowings -44,487 44,487
Net (decrease)/increase in cash and cash
equivalents -8,008 53,854
Cash and cash equivalents at beginning of the
year 129,293 75,439
Cash and cash equivalents at end of the yea 121,285 129,293
Segmental analysis
For the year ended 31 March
Revenue
2004 2003 2004 2003
R`000 R`000 % %
Wealth and asset management 197,797 99,346 57% 39%
Structuring, broking and
distribution 71,367 45,851 21% 18%
Group investments (net of group
costs) 66,465 41,509 19% 16%
335,629 186,706 97% 73%
Investment banking 0 12,987 0% 5%
Advisory 0 29,034 0% 11%
PereSys3 11,867 26,922 3% 11%
347,496 255,649 100% 100%
Profit from operations
2004 2003 2004 2003
R`000 R`000 % %
Wealth and asset management 58,803 16,152 56% 23%
Structuring, broking and distribution 17,172 8,954 16% 13%
Group investments (net of group costs) 29,547 29,545 28% 43%
105,522 54,651 100% 79%
Investment banking 0 543 0% 1%
Advisory 0 13,364 0% 19%
PereSys3 133 836 0% 1%
105,655 69,394 100% 100%
3 - The business was disposed of with effect from 1 October 2003
Notes
1. Accounting policies
The results are prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and the South African Companies Act of
1973. The accounting policies applied in the preparation of the results are
consistent with those of the previous financial year, except as noted below.
2. Change in accounting policy
As a result of a recent ruling by the GAAP Monitoring Panel, the group has
consolidated the Peregrine Incentive Trust and Citadel Staff Share Trust.
The Peregrine Share Incentive Trust has been consolidated as if it were a
subsidiary from date of formation of the trust. The loan to the trust has been
eliminated and the shares held by the trust have been shown as treasury shares.
The trust held 6,109 million Peregrine shares as at 31 March 2002.
The Citadel Staff Share Trust has been consolidated from the effective date that
Citadel became a wholly-owned subsidiary of the group. As part of the
acquisition of Citadel, the trust received 13,430 million Peregrine shares in
settlement of the purchase price of Citadel shares held by the trust. On
consolidation of the trust, the Peregrine shares held by the trust have been
included in treasury shares with a corresponding reduction in the carrying value
of Citadel, and therefore goodwill in the group accounts.
The comparative figures have been appropriately restated. In addition to changes
evident from the statement of changes in equity and earnings per share
calculations,the following items have been restated:
Trade
Intangible Loan and other
assets receivable payables
R`000 R`000 R`000
Consolidation of Peregrine share
trust -12,695 36
Reversal of impairment of loan to
share trust 314
Consolidation of Citadel share
trust -36,933
Proceeds received on vesting of
shares
Reduction in goodwill amortised 2,154
-34,779 -12,381 36
Balance as at 31 March 2003 as
previously reported 256,279 12,381 90,577
Restated balance 221,500 0 90,613
Cash and
cash Attributable
equivalents earnings
R`000 R`000
Consolidation of Peregrine share
trust 132
Reversal of impairment of loan to
share trust 314
Consolidation of Citadel share
trust
Proceeds received on vesting of
shares 100
Reduction in goodwill amortised 2,154
232 2,468
Balance as at 31 March 2003 as
previously reported 129,061 13,411
Restated balance 129,293 15,879
In the cash flow statement the cost of acquisition of subsidiaries has reduced
by R36,933 million with a corresponding increase in the cost of acquisition of
treasury shares. Proceeds received by the trust on vesting of shares held by the
trust total R100,946 and are disclosed as part of financing activities.
Commentary
Introduction
The Peregrine group`s positioning as a leading player in the fields of wealth
and asset management has produced a strongly cash-generative performance for the
year under review.
The strong cash flow generated by the group has enabled Peregrine to:
-repay all of its external debt by year-end (R44,5 million outstanding at the
beginning of the year)
-settle all its outstanding vendor liabilities (amounting to R31,5 million)
-acquire treasury stock up to the maximum allowed level of 10% of shares in
issue at a cost of R20,4 million
-resume dividend payments.
Results
Profit from operations increased by 52% to R105,7 million from R69,4 million.
Cash generated from operations was robust at R135,4 million, with cash flow from
operations before changes in working capital up 74% to R112,9 million, from
R64,7 million the previous year.
Attributable earnings of R42,5 million were 168% higher off a low base of R15,9
million. Headline earnings of R68,5 million were 14% higher than the previous
year`s R60,1 million. With the weighted average number of shares in issue
reduced as a result of share buyback activity, headline earnings per share rose
21% to 33.2 cents per share.
Operations
Wealth and asset management
Citadel, the group`s wealth management arm, increased its assets under
management by 12% to R8.4 billion at year-end, weathering the storm of a strong
local currency. New client inflows averaged just under R100 million per month,
with the average new client size being in excess of R4 million. The client
retention ratio was especially pleasing, being in excess of 97% for the year.
Without earning any meaningful performance fees, Citadel comfortably exceeded
its budget for the year.
The business has substantial capacity to increase its assets under management
and remains highly geared to the upside in international and local capital
markets as well as to any depreciation in the rand.
Whilst maintaining an excellent level of performance across its suite of hedge
and performance funds, Peregrine Capital increased its funds under management by
115% to R965 million at year-end and topped the two published local hedge fund
surveys for the past year on both an absolute and risk-adjusted basis. The
increased assets under management and sound investment performance resulted in
the contribution from this area being a multiple of that earned in the previous
year.
The group`s incubator hedge fund business grew assets under management to R193,2
million from R7,1 million at the beginning of the year. This includes R98,7
million invested into the Oakmont fund managed by Peregrine Capital. Despite the
growth in assets, the business still needs to achieve critical mass but is
expected to post a smaller loss in the year ahead than that experienced in the
year under review.
We hold the view that over the medium to longer term, the issue facing
participants in the hedge fund industry in this country is not the availability
of willing investors but rather the scarcity of good managers and the capacity
constraints faced in managing money locally. To this end, the Peregrine group
continues to constantly seek out and nurture outstanding individuals and teams.
PeregrineQuant, the group`s quantitative asset manager, increased assets under
management by 60% to R5,2 billion. This asset growth together with active cost
control allowed the business to reach breakeven on a monthly cashflow basis by
year-end. Any growth in assets under management from this level will produce a
positive contribution for the year ahead.
Group investments
The group`s proprietary capital falls under the portfolio of the CEO and his
team. It is currently predominantly invested with Peregrine Capital across its
suite of hedge funds. A small portion is invested into the group`s incubator
hedge funds and a similar amount into a select number of private equity
opportunities.
All costs incurred in running the group and not recovered from subsidiaries are
offset against the returns earned on proprietary investments. The net return on
investment earned by the group after all costs was virtually unchanged from last
year at R29,6 million.
Structuring, broking and distribution
The contribution of this area almost doubled over the period from R9,0 million
to R17,2 million. Peregrine Securities had a particularly successful year across
the range of its stockbroking, derivative broking and structuring activities.
The business continues to make inroads into the hedge fund, arbitrage and other
proprietary trading markets and is taking a far more pro-active approach to
product development, derivative-based research and deal structuring.
This pro-active approach is being augmented by the efforts of the financial
solutions team which is mandated to market the group`s specialised range of
investment related products and services.
Disposal of subsidiary
With effect from 1 October 2003, the group disposed of the business of Peresys
to a consortium led by management and a private equity firm.
Change to the board of directors
As announced on SENS, Mr Rudi Stumpf resigned as a non-executive director of the
company with effect from 31 March 2004. We thank Rudi for his valuable
contribution to the group and wish him continued success in his business
endeavours. It is the board`s intention to appoint additional non-executive
directors during the course of this year.
Share scheme
A circular was posted to shareholders on 14 May 2004 relating to amendments to
the Peregrine Share Incentive Scheme and giving notice of a general meeting of
shareholders to be held at the registered office of Peregrine at 09h00,
Wednesday, 2 June 2004.
Prospects
A substantial portion of Peregrine`s financial performance is ultimately
dependent on market conditions and the investment performance of its various
wealth and asset management businesses. As such it would be imprudent to
forecast earnings for the period ahead.
Nonetheless, the directors of Peregrine are confident that the group has built a
sustainable platform from which to continue to assert itself as a highly
profitable wealth and asset management firm.
Dividend
Notice is hereby given that a cash dividend of 5,0 cents per share has been
declared by the directors for the year ended 31 March 2004. In compliance with
the requirements of Strate, the following dates are applicable:
Last date to trade cum dividend Friday, 2 July 2004
Trading ex dividend commences Monday, 5 July 2004
Record date Friday, 9 July 2004
Payment date Monday, 12 July 2004
Share certificates may not be dematerialised or rematerialised between Monday,
5 July 2004 and Friday, 9 July 2004, both dates inclusive.
By order of the board
Louis Fourie Sean Melnick
Chairman Chief executive officer
Sandton
20 May 2004
Date: 20/05/2004 03:38:12 PM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
